September 22nd, 2012

I found this article in the Guardian by Frank Field from January this year. I vehemently disagree with it and I’ve given my reasons below interleaved with the original article, paragraph by paragraph. As bbeth says in a comment below “housing associations are private and charitable bodies. Frank Field has NO right to be telling them what they should do with their assets”.

Following it is a much more reasonable article by Keren Suchecki of New Start whose views are like a breath of fresh air.

Britain is in a deep housing crisis. High prices and low supply, strict lending criteria, and unbridled rent rises have created a vicious circle. Home ownership is plummeting.

This obsession with home ownership on behalf of certain politicians does not reflect the true needs of the wider society which is quite simply to put a roof over ones head at a reasonable cost and that used to happen either by property purchase if you could afford it, or by getting a council house if you couldn’t and there was never any shame in the latter. Not until Thatcher stepped in and residualised the sector that is.

The answer is staring us in the face but nobody seems to have the political will to do it and that is to build large numbers of houses to rent at cost, and not at market rates.

We need a radical new policy both to ease the pressure on social housing and lend a helping hand to aspiring homeowners. David Davis MP and I have published a pamphlet with the Institute for Public Policy Research on such a new policy.

Yes that radical new policy would involve building large numbers of council houses for rent at cost and not market rents.

High house prices are part of the reason for the social housing shortage, but there is also the low turnover of social housing. Social housing is an important source of community stability as well as a safety net for those who face homelessness.

“Low turnover of social housing”, that’s an interesting phrase, what’s wrong with the residents of social housing living in it for life? If “Social housing is an important source of community stability” then better that they stay in it for life and not be on a merry-go-round of forever moving home.

As for your other comment about a “safety net for those who face homelessness”, council housing was never a safety net, it was a home for life and that’s what it should remain. It’s only the regressive policies of Conservative Governments since 1979, the failure of New Labour to reverse right to buy, and the present coalition that seek to make it so.

However, while some social tenants need state support for life, others see their fortunes improve but remain in social housing long after they need it. In Westminster alone, more than 2,000 social tenants earn £50,000 a year or more, with around 200 on six figure salaries. Some even have second homes abroad.

Why pick on Westminster? You’re the MP for Birkenhead, not Westminster which is atypical in its make up of residents. You are twisting the argument here by using an example that does not represent the majority of the country.

The presence of high earning residents on council estates serves to balance the severely skewed demographic that now exists owing to the needs based allocations and high dependency required to obtain “social housing” since Right to Buy reduced the amount of “social housing” available. To remove these people from the estates would further worsen the average income per head across the estate.

What percentage of council tenants across England have second homes abroad? Which planet are you living on?

The coalition government was quick to recognise the problem. Lifetime tenancies will still be permitted for social housing from April 2012, but local authorities will also be able to offer shorter, “flexible” tenancies. However, flexible tenancies will not solve the problem – they will just shift it around.

There is no problem to be addressed, the removal of Lifetime tenancies is an appalling act designed to residualise “social housing” to being only for those in greatest need and then only for a limited period of time. A “flexible tenancy” is a slap in the face to someone looking for security of tenure and a disgraceful act by a so called civilized society.

Worse, the looming prospect of losing a home may create all sorts of perverse incentives, worsening dependency rather than improving it, and making it even more difficult to grow a sense of community. And “moving on” more successful tenants will weaken local bonds which badly need strengthening.

You have contradicted yourself in a spectacular manner in the paragraph above, are you sure this was intended to be included in the same article? Quite astonishing, you are here making the arguments necessary *not* to move people on or cause them to feel insecure.

What we need is a system that encourages people who no longer need social housing to become homeowners, thereby freeing up the capital trapped in their homes to build new stock for the less well-off.

There you go again, “no longer need social housing”. What do you mean “no longer need social housing”, it’s not housing of last resort, it is state owned, rented at cost, secure housing, or ought to be. Not a transit camp for the destitute.

“Freeing up the capital trapped in their homes”. This used to be known as a state asset, there is no “capital trapped in their homes” perhaps you have fallen into the same trap as the Conservative borough of Hammersmith and Fulham in seeing council estates as “assets to be sweated”, or unrealised development potential, with council tenants standing in the way of progress. Is that how you see council tenants? As cash cows?

There is no need to sell existing council housing to “build new stock for the less well-off”, interest rates are at a historic low, Britain’s credit rating is good, and borrowing to build housing would be a Keynsian move generating employment and housing people, acting as the engine of badly needed economic growth.

In 1980 councils and housing associations built almost 100,000 new social homes. Last year that figure was 25,000. With house prices, rents and population all expected to rise considerably over the next two decades, the shortage of social housing will only become more acute unless this trend is reversed.

So what can we do about it?

Build council houses, obviously.

I tried to persuade Harold Wilson’s government to sell council houses, but Britain had to wait for Margaret Thatcher’s right-to-buy policy to transform the lives of some of the least affluent in society. [my emphasis – Ed.]

“Some of the least affluent in society.” Well that was a roaring success then wasn’t it? Enriching a small group of people who happened to be in the fortunate position of living in a council house they could afford to purchase at a discount whilst depleting the stock of council housing.

“So once again the tax payer pays to build something only to have it sold off to benefit of a small few. Rinse, repeat.”

So while council houses are still open to the right to buy, most of the stock in good areas where people want to buy are owned by housing associations which are exempted from the policy. David Davis pushed for the sale of housing-association homes when he was chairman of the Tory party in 2002.

We believe the key to success is therefore to expand the right to buy to housing association tenants on the strict condition that the total money thereby raised is used for a new building programme. With the building industry almost on its knees this new source of revenue will provide valuable employment.

Thus further diminishing the stock of homes to rent at below market costs.

Some critics of right to buy say it makes the social housing shortage worse by diminishing the stock. However, it is not the case that tenants who exercise the right to buy would otherwise be leaving social housing; the vast majority would simply keep renting their home.

No. This is untrue. All too often in the past the owners would then buy and move into a house on the open market, with a large mortgage, and let out the former council house, many of which are now being rented back by councils from private landlords in order to provide housing for the homeless, at rents greatly inflated from what they would have been had the property remained in council hands.

The home would not become available to others, and the waiting lists would grow still longer.

Once a council house or flat is sold, it is lost from the national housing stock, it is not available to be exchanged or to be handed on when the residents die. More importantly it remains a placeholder for housing built and rented out at cost and not subject to market forces which it immediately becomes once it is sold.

If the freehold were retained by the council then that would be one thing but when the freehold is handed over at the time of sale to the purchaser then that property is entirely lost from the pool of state owned housing.

As long as the total proceeds of social home sales are reinvested in the housing stock, the right to buy is a win-win policy for everyone; tenants become homeowners, the building industry gains a long-term building programme and unemployed building workers get jobs.

How can this be if the homes are being sold at a large discount? How can you build like for like if the money from sales receipts is not enough to build one for one? All you are doing thereby is diminishing the council housing stock not retaining it? This is a disastrous policy and one that should be resisted by all means.

If you want to read some common sense on council housing then you don’t have to look further than this:-

The reintroduction of large discounts for right-to-buy tenants confirms Cameron is Thatcher’s ideological love child. However, unlike Thatcher’s attempt to eradicate housing stock through her right-to-buy scheme which outlawed the spending of receipts on replacement housing, this government’s approach to selling off the family silver is promising one-for-one replacement. But we shouldn’t be fooled by the headlines – this doesn’t mean building new council houses. The consultation states that ‘all right to buy sales above current predicted levels will be replaced by new homes for affordable rent’.

But what about those people (or rather the public/tax payer) who paid for the houses to be built and are then massively subsidising their sale at way below market value. so a few people who buy with massive discount gain financially whilst everybody else subsidises them. That is not a win/win. I paid towards those houses being built and we are recovering nowhere near the build costs, and nowhere near the market value – so I (and all the other taxpayers) have lost. so in reality it is a win for the very few and a lose for the majority (yet again).

It really makes one wonder who is running this country when MPs can only see their own ideological view and cannot even recognise others.

This is an absolutely crazy idea – in Scotland the RTB is being abolished for new tenants or for new build property in law, & pressurised areas can suspend it. That means that there will be a continuing supply of social housing & rental income will be able to maintain it, thus ensuring that Councils & Housing Associations are free to borrow to build more (supported by government grants).

Frank Field seems to assume that a rented Council or Housing Association house should be the housing of last resort, available only to people who can’t afford anything else. I don’t think that is the case. It should be seen as a tenure as valid as any other. Houses are allocated on the basis of need, as long as that continues then I don’t see why security of tenure should be attacked if the tenant’s income passes beyond a certain point. As long as the rent is paid then the tenant is contributing to the future of the Association or Council they are renting from.

Right to buy is a means of stimulating the housing market and a way for government to intercede and create another housing bubble by priming the pump with an injection of low cost but decent quality homes.

Since the amount of social housing has massively decreased and it has become a facility that only serves the poor, it’s become a poor programme and allowed those on the right, like yourself, to stigmatise people who use it for your own political purposes.

There should be more social housing, and social housing should be available to those who want to live in it in order to create balanced communities. It shouldn’t have little islands of dumping grounds where councils have a couple of sub standard blocks and dump people with problems like addiction in them.

Selling off housing association stocks rather than starting by redeveloping brownfield sites to create more capacity and either selling some or all of it at artificially lower prices to let first time buyers into the market, or on shared equity, is a short term shot in the arm for the housing market that is part of Camerons ‘reinflate the housing bubble’ plan to get us economically back on track.

Flogging off what is left of social housing now and promising to build some more later seems a little familiar, and I think, given past behaviour from Tory politicians like yourself, I’d much rather you built new stock and flogged that off because you can’t be trusted not to use the proceeds from sales of social housing for some half baked pet project, or to pay for scrapping the 50p tax rate, or capping council tax or some other thing that is of limited or no benefit to ordinary people.

When you’ve got a plan to build some starter homes, we’ll listen, but selling off public assets cheap with the promise of future investment is a promise we’ve heard many times before and never seen kept.

Mr Field says this: ”However, while some social tenants need state support for life, others see their fortunes improve but remain in social housing long after they need it.” This is portraying social housing as the housing of last resort – I don’t see it that way. I grew up in a Council house, I didn’t think it was a unit of state support I thought of it as my home, I didn’t see my parents as wards of the state either, they were just ordinary working class people.

The Tories are seriously talking about limiting access to social housing & changing the form of tenure so it effectively becomes a form of temporary accommodation until the tenant’s fortunes improve. That just completely claws the feet away from the concept of security of tenure – how do you expect stable communities to exist in those circumstances?

I think the major issue we face is enabling access to affordable housing. The preference shown for owner occupation or private buy to let renting has not provided that – hence the Housing Benefit crisis in London because rents are so high. Introducing further RTB or making access to social housing means tested would not help increase the stock of affordable housing.

Yes, indeed my landlady has benefited immensely from RTB, having bought 20 years ago and now charges £1500 a month for the pleasure of an ex state-owned asset (rent hike of £100 per month from January). As private tenants with no chance of securing social housing, we will not benefit from such schemes. They are socially divisive, reduce available social housing stock and benefit the few at the expense of the many. A friend of ours has just left the country when the rent on his ex-council tower-block flat (complete with hoodies and drug dealers) was hiked to £1200 a month.

This is the crux of the housing benefit debate. Homes that were built for low income families have been bought with massive discounts are now rented privately at extortionate rents to the very people who should be benefiting from social housing, hence the £20b (and rising) housing benefits bill.

Reducing housing benefit is treating the effect, not the cause. The cause is sky high housing costs and very little choice but to stump up.

This article is founded on the bollocks assumption that people who rent are some sort of second class citizens!

All over the world, people CHOOSE to rent!

By renting they make themselves part of a flexible workforce.

By choosing to buy, people lock themselves into a situation where any move to change work/take up another job necessitates the expensive, and worrying additional problem of selling one house and buying another! Far from “right-to-buy” solving problems it causes them!

Why should it worry anyone that families on good salaries live in the so-called “social housing.” If they’re paying rent, then that’s the end of the matter!

And let’s forget the idiot standard “social housing” (presumably you mean housing for those at the lower end of the spectrum) and get back to calling it council, or public housing!

Give security of tenure in private rented accommodation ( just about every other European country manages to do this!)

Purchase and rennovate old housing stock for social rent before building new.
Give all renovation/ building work to local firms rather than big national contractors, where building do so in small developments not big estates.
Do not bring back right to buy! Yes it was great for those who bought. It was lovely for my husband and his siblings to inherit a share in the profits from their mother’s ex council house.

But you know what? They didn’t need the money and now there are young people in that village who desperately need social housing and ooopsie! There doesn’t seem to be any! So , since their income won’t let them buy they now rent ex council houses from private landlords and the council picks up the tab in the form of housing benefit!

I was brought up in a council home. A lovely modern 3 bed semi with garden.

It was a dream come true for my parents to get this house and move out of the privately rented Glasgow tenement slums.

As far as I’m concerned Council homes were not meant as a stop gap until such times as the tenant could buy privately. They were a social alternative to the mortgage trap for people who didn’t want to buy a house. You paid a fair rent and when you died or no longer needed the house it would be available for another family. What’s wrong with that?

I do not recognise the Tory (and now Coalition) government obsession with every one aspiring to own a house. A house is for living in. Not an investment opportunity.
In Scotland when I was growing up in the 60’s and 70’s the vast majority did not buy a house, even though there were very few people unemployed.

If private rents are high now it’s only because there were too few social houses being built. The exact same reason why my parents got a council home in the first place back in the 1960’s.

We have gone backwards in the pursuit of private profit. Profit for the banks and other mortgage providers, the Insurance industry, the dodgy builders and repair contractors. And of course the home owners themselves are encouraged to borrow on the collateral on their homes, re mortgages, credit cards, car loans. Who benefits from that? yet again the financial Industry.

I have my own council home now, so does my daughter. We both work!

We never embarked on a council tenancy because we were in desperate need. The idea was it it was a social solution to having a decent place to live. The added bonus being it was free from the grasping hands of the financial sector.

muscleguy

7 January 2012 5:05PM

Yet again I am glad I live Scotland where the real issues of homelessness mean RTB has been abolished. Here in Dundee the council has a rolling program of upgrading social housing. Decrepit and unlettable multis have and are being demolished (great to watch) and new, low rise, village style housing that people want, with a little bit of garden replacing them. Sitting waiting to see the latest three be blown up (very theatrically) and talking to everyone else so gathered they were all behind the council program.

The council also has a good program of dealing with problem tenants, evicting them, then taking them into controlled living environments where their problems are addressed and their behaviour challenged. Cameron even came to see prior to the election. Doesn’t seem to have added to policy, spending money to save money no longer makes sense apparently.

Still, when you English have come to your senses you can send people North on tours to learn how to reinvent the wheel you have demolished. Maybe we can start charging for touring English politicians to raise revenue?

RTB pt.1 under Maggie caused in part the huge problems we have now with housing shortages. The best stock was sold off leaving a residual for primarily those on benefits, rather than working to live in. No more balanced communities, many more ghettos. If it hadn’t been sold off the public asset could have been used to help keep rents low.

RTB pt.2 doesn’t even add up. There’s an example in Inside Housing where you sell off 16 houses and the resulting amount doesn’t even cover the build costs of 1.

PLUS housing associations are private and charitable bodies. Frank Field has NO right to be telling them what they should do with their assets.

That’s a very interesting point, Mr Field….though some statistics would have better supported your case. However, I suspect this “evidence” is merely anecdotal and you have no idea how many council tenants own homes abroad. This statement, as you well know, was simply designed to be inflammatory. However, where this argument falls is that these are the very same people who will buy their council home at a substantial discount, so not only are you encouraging them to keep their second homes, you are rewarding them by putting an extra wodge of equity in their pockets.

You see, I know three couples from the same village who all bought their council homes under “right-to-buy”. They then used the substantial equity to buy and renovate houses in SW France. Once completed, they then all took “early retirement” and moved into their “second” homes and rented out their ex-council homes, using the income to both finance their mortgages and living costs abroad.

Now, somehow I can’t help feeling that the taxpayer has simply gifted these people with a desirable lifestyle simply because they were in the right house at the right time. This is fundamentally wrong.

Regrettably, I do not feel you are worthy of being a Labour representative and simply further demonstrate why Labour are still unfit to govern. It is to his discredit that Harold Wilson allowed you to remain in the party. And if you suspect your “pamphlet” will give Labour any credibility you are, sadly, very wrong as it is the Tories who will reap the electoral reward of this misguided nonsense. So, a “win” for Cameron and a “win” for the second homeowners you seem to criticize, but I am at a loss to identify any other victors in this feeble argument.

The Guardian had another Right to Buy “love-in” today for people in the industry which resulted in two comments which struck me as getting straight to the point of why this dreadful policy must be discontinued forthwith:-

Are the panel concerned about the possibility of RTB homes ending up in the hands of buy-to-let landlords, and do they feel there should be provisions in place to prevent this?

According to the Red Brick blog, the Westminster city council’s housing scrutiny committee found the council sold 9,135 council flats under the earlier right-to-buy, and that 3,603 (39%) are now sublet and “owned by small and multiple landlords”.

LaraAtOduDua
1 October 2012 1:10PM
I wanted to make a few points before I go off to my next meeting in 20 mins – the meeting that is. Sorry I can’t stay to have a proper discussion. But here goes;

1) RTB is the worst thing to have happened with regards to the provision of housing in this country. I have very straight forward and probably old-fashioned views about this. Houses built for rent should stay for rent. If people can afford to buy they should do so on the open market with everyone else.

2) RTB is one of the key causes of the property bubble. Just look at the article in today’s housing press about former council homes in Westminster now being sold of the best part of £500K. Once sold, the subsidy is lost to society forever and the profit is in the hands of the individual.

3) There is no way any sale via RTB will result in a one to one re-provision. If it was that simple we would not have the housing shortage we have today.

Thats’ all folks. I gotto go. Wish I could stay. Hope you have some interesting debates and disagreements.

“Right to buy has been an absolute disaster because if you’d given people the right to buy and said that where there’s still a housing shortage each one sold has to be replaced that would’ve been fine.”

“But to give the right to buy while you stop building just meant that you ended up with what wasn’t bought ended up with the poorest people. That’s the disaster, you get social division and ghettoisation.”

The Dispossessed

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